The federal spy service has been dealt a rare rebuke by a judge, who has rejected a CSIS bid to wiretap Canadian citizens or corporations allegedly in cahoots with suspicious foreigners.

In a heavily censored Dec. 6 ruling touching on a Top Secret intelligence dossier, Madam Justice Anne Mactavish approved wiretaps against a network that is suspected of operating in Canada at the behest of an unspecified country. But she struck from the wiretap application the names of Canadian citizens or corporations associated with the network, ruling that their inclusion would be an overreach on civil liberties.

It is extremely rare for the Federal Court to reject any such wiretap application. This ruling effectively makes it illegal for the Canadian Security Intelligence Service to directly target the network’s Canadian components, which are not identified.

According to Judge Mactavish’s ruling, either Foreign Affairs Minister John Baird or Defence Minister Peter MacKay had kick-started the probe. The ruling doesn’t specify which, but the law allows only Foreign Affairs or National Defence to make a request to the Public Safety Minister – namely, to put CSIS on the case of suspected foreign agents residing in Canada.

“She gave them half a loaf,” observed Ron Atkey, a national-security lawyer, after reading the decision.

Pointing out that CSIS got its overarching warrant approved, he said the domestic-spying tensions alluded to in the ruling have existed ever since the spy service was formed in 1984. Why would legal matters come to a head now? “It’s probably the government being a bit more aggressive and CSIS being a bit more compliant,” Mr. Atkey said.

The targets of the overarching warrants are anybody’s guess. CSIS director Richard Fadden has very publicly sounded the alarm about foreign agents of influence, particularly ones from China, growing too cozy with Canadian politicians.

Mr. Atkey said CSIS’s laws could be broad enough to allow for the spy service to target anyone from Chinese or Russian diplomats to Palestinians running goods to Gaza – or even to American officials who might be trying to unduly influence energy policies. That’s because the low legal thresholds in Section 16 of the CSIS Act allow the spy service broad latitude to keep an eye on what foreigners are doing in Canada, provided cabinet ministers sign off on the spying activities.

But there are limits. When the CSIS Act was debated in the early 1980s, critics feared these provisions led to a “hidden agenda” that would allow innocent third-party Canadians – for example, professors and journalists who dealt with Russia, which was then still a Cold War enemy – to be swept up in government eavesdropping dragnets.

To address such fears, the law was crafted to protect Canadian citizens even if they might be associated with a group of foreign agents.

The new ruling states that CSIS officers don’t have to hang up the phone every time they stumble onto a Canadian calling into members of the wider foreign-agents network – it prohibits the targeting of these Canadians, but not “insofar as those communications may be incidentally intercepted.”

CSIS argued that because the overarching warrant was directed at a foreign group, the prohibition against naming Canadian targets as part of that group ought not to have applied. That interpretation, Judge Mactavish wrote, “must be rejected as it would effectively render the provision devoid of any real meaning insofar as the protection afforded to [Canadian citizens, permanent residents or corporations] is concerned.”

Judge Mactavish’s ruling points out that CSIS could still get warrants against such individuals if they could be linked to espionage or terrorism.

However, investigations involving agents of foreign influence usually centre on more murky and subtle affronts to sovereignty. The public rarely hears about such cases. Canada has no criminal laws against undue foreign influence, even though other countries do.

The United States, for example, routinely prosecutes individuals under its Foreign Agents Registration Act – a law that makes it illegal for foreigners to slyly shape U.S. policies at the behest of foreign entities. Last year, for example, two Pakistani-Americans associated with the Kashmiri American Council were charged under the law for being paid agents of Pakistan’s intelligence services, which had tasked them to influence U.S. policies.